In the beginning, the system consistently paid significant incentives. In the long run, this alerted workers to view the incentives as a major aspect of their normal pay and not as motivating force to move forward. The incentive plan lost adequacy as a motivational instrument. The employees’ mentality is that of Vroom Expectancy Theory, “in which motivation is a product of three elements: valence (how much one wants a reward), expectancy (one’s estimate of the profitability that effort will result in successful performance) and instrumentality (one’s estimate that performance will result in receiving reward)” (Newstrom, 2015 p.131-2). When cutbacks occurred, remaining workers became insecure in their job and influenced their yearning to perform. They did just what was expected of them to stay employed and nothing additional. “Employees were not compensated for seven months due to low productivity and profitability, which made the employees furious and distrust the plan” (Beer & Collins, 2008 p.2). This is adequate evidence that supports McGregor’s Theory X and Theory Y.
Despite the fact, that management was fully aware of the employees’ grievances and the need to redesign the incentive plan, management does nothing to ratify their complaints. Evidently, Engstrom management team is not meeting the mental needs of the workers and breaks Newstrom implication of the "unwritten mental contract that workers sign upon employment with the company” (Newstrom, 2015, pg. 87-9). As a
“Incentives are the cornerstone of modern life”(Levitt and Dubner 12). Levitt and Dubner once mentioned in their book “Freakonomics”. According to Oxford dictionary, incentives are something tends to incite to action or greater effort, as a reward offered for increased productivity (“incentives”). In business field, incentives are something given by bosses to encourage their employees to endeavour in bringing benefits to their business. For a simple example, the employee who hits the monthly or year sales target will get cash or prizes as incentives. Apparently, these incentives are something that motivates employees maintains their great performance and also to motivate other employee, whoever wants to get the incentives, work harder.
Many employees felt they were doing all of the work and should get the bonuses, not management. This plan led to the employees feeling as though they were not treated fairly because of the many rate changes. The employees did not have input into the plan and felt management was playing games with the formula.
One of the valued but demanding customer, who had considered Engstrom as a certified supplier, was requesting a large order but Engstrom was unable to deliver on time due to the low productivity problem. The plant manager along with his assistant were already dealing with the troubling numbers when this happened. While the task was a tough bone and not easy to tackle, and there were a lot of factors needed to be taken in to consideration. The leadership started to analyze and break down the main causations other than the overall economic trend that dragged the company into the turmoil, as it turned out, it was the low, frustrated employee morale and diminished work satisfaction.
The manager’s retaliatory approach to lower the loss percentage was not a motivational factor for the employees at all when he changed the number of hours employees had to work to receive free food from 6 hours a day to 12 hours. Evidently the employees did not respect his authority as the change did not seem to have an effect on them nor did it give them any motivation to do better. These jobs where minimum pay jobs
Pay and Rewards – pay and rewards attract, motivate and retain staff. The employment contract which lists rewards, whether it be pay, bonus or benefits, can remove animosity amongst employees and employers. However, recent research reveals that employees are no longer motivated by a financial reward alone, but
There are five major components of job satisfaction, one being monetary benefits (Ghillyer 2010). According to Ghillyer (2012) an employee’s behavior towards their pay may affect their work performance. The issue that arises with employee motivation is that management is unable to satisfy all (Ghillyer 2010). This becomes an even larger problem when employees being joining unions, resigning and being frequently absent (Ghillyer 2010).
The Engstrom Auto Mirror Plant relatively small supplier based in Indiana is as yet confronting issues with efficiency, and benefit misfortune. Creation laborers have turned out to be troubled and lost trust in the Scanlon reward design. Engstrom Auto Mirror Plant is encountering a broken impact in their social framework. Workers have an absence of intrigue and trust for the organization due to the fizzled motivating force design in movement. Workers feel the estimation of the Scanlon design isn't reasonable in view of the measure of rewards that is disseminated and reasonableness. Employees morale and overall motivation has severely decreased. With such, Engstrom faces low employee productivity, low profit margins, and a risk
The strengths that I have identified in myself are leadership, independence, curiosity, dependable, diligent, responsible, passionate, and determined. I believe that I can bring those qualities to the incentive program and that I can help benefit both myself and others around me. According to my friends and teachers, I also tend to bring positivity with me as well. The world isn’t cupcakes and rainbows, they do exist, but not for everyone and terrible things are part of the world as well. Because of that, I consistently try my best to brighten somebody’s day, no matter if it has been gloomy or joyful. Nobody should ever face anything though alone, and when something extraordinary happens, you should always have someone to share and celebrate
Reward Management (RM) has been defined as the distribution of monetary and non-monetary rewards to employees in an effort to align the interests of the employees, the organisation, and its shareholders (O’Neil, 1998). In addition O’Neil (1998) also suggests that a RM system can serve the purpose of attracting prospective job applicants, retaining valuable employees, motivating employees, ensuring legal requirements relating to direct and indirect rewards are not violated, assisting the company in achieving human resource and business objectives, and ultimately assisting the organisation in obtaining a competitive advantage.
“While Mangers complain about lack of motivation in their workers, they might as well consider the possibility that the reward systems they’ve installed are paying off for the opposite”.
Many companies look to salaries and benefits as the first places to cut back when looking to make changes that involve cost-saving. When this happens, it is inevitable that some employees will leave the company to seek employment elsewhere. The employees that remain, whether they stay voluntarily or because they could not find employment elsewhere, are often resentful. Motivation decreases, taking job performance along with it. Employees lose their company loyalty and may even become angry enough to purposefully sabotage the company.
To motivate employees to work towards reaching organizational goals, managers frequently depend on some form of enticement. Beyond monetary compensation, awards and additional types of acknowledgment can be given, and the ability to choose a work schedule is a possibility. A reasonable pay system, which would be an incentive for individuals and groups to achieve organizational goals, is a hardship manager’s face (Jones & George, 2011). Within the company that I work for, every quarter awards are presented to Customer Service Agents who have maintained a 95 percent or above quality score. Monetary awards are given out as well as time off coupons.
Instead of jumping to different achievement goals as problems arise, the visions and beliefs should have been determined first and that would help shape the overall goal of the company. While working towards goals such as profitability and growth, the visions and beliefs help keep employees in line and to some extent control the minimum expectations of the development of products, thus possibly lessen or avoid problems that did arise. The incentive scheme were not properly designed to take into account effects of employee actions and the impact it would have on the company as a whole and other stakeholders. It should some what reflect and reiterate these visions instead of promoting and motivating employees to be self interested in their own affairs and achieving the targets at “all costs”. All in all, there were minimal controls and checks in place, it was more of a one way push towards the goals and not looking back
Keeping employees motivated in addition to creating incentives and/or additional ways for employees to receive more compensation will create better performance overall within an organization. Contrary if company B gives their employees incentives to perform, without any motivational tactics they probably will not have as many top performances as company A, in addition the company may only seek short term rewards verses have long term success. Lack of motivation for employees within an organization, can cause long term damage for the company’s success. Different things motivate everyone; therefore there should be a system in place to keep employees motivated for the long term success of the company. In the MBM textbook under the concept of incentives, compensation, and motivation, there are a couple of different views of how it should be applied within an organization. We will discuss The Social Role of Profit, Personal Profit and Losses, and the way Market-Based Management view how incentives, compensation, and motivation should be applied and the things that effectively drive employees’ actions while at work.
A study completed by the University of Michigan revealed that as employee motivation improved, the a company’s stock reached higher subsequent returns the following year, spanning times both good and bad. As an example, in 2002 the Standard & Poor 's 500 returned negative 22%. Yet the study found that for every five points added onto a firm 's Employee Motivation Index--how the study kept score--it returned an additional 2% in stock price the following year (Serchuk, D. n.d.). Costco subscribes to this type of belief in that a satisfied employee that enjoys higher wages, potential for bonuses, job security and full appreciation for their work is not only recognized by management, but taken into consideration when promotions for other positions are considered.